Introduction

Agriculture is the backbone of India's economy, contributing significantly to GDP and employment. However, a lack of proper infrastructure has been a major challenge for Indian farmers, leading to post-harvest losses, storage issues, and inefficient supply chains. To address this, the Government of India launched the Agricultural Infrastructure Fund (AIF) on August 9, 2020.

AIF is a ₹1 lakh crore financing scheme aimed at developing post-harvest infrastructure and community farming assets across the country. The fund provides long-term, interest-subsidized loans to help farmers, FPOs (Farmer Producer Organizations), startups, and agri-entrepreneurs build warehouses, cold storage units, processing facilities, and other essential agricultural infrastructure.

In this article, we will explore the objectives, key features, eligibility, benefits, challenges, and impact of the Agricultural Infrastructure Fund (AIF).

Objectives of the Agricultural Infrastructure Fund (AIF)

The AIF scheme aims to:

✅ Develop Modern Infrastructure – Build cold storage, warehouses, grading & packaging units, and supply chain facilities.
✅ Reduce Post-Harvest Losses – Improve storage and processing to minimize wastage of crops.
✅ Strengthen Farmers’ Income – Help farmers earn more by enabling them to store and sell crops at the right time.
✅ Promote Agri-Entrepreneurship – Encourage startups, FPOs, and agri-tech companies to invest in rural infrastructure.
✅ Boost Rural Employment – Create job opportunities in villages by setting up new agricultural businesses.
✅ Encourage Private Investment – Attract private players to invest in agri-logistics and food processing sectors.

AIF plays a crucial role in modernizing agriculture and improving productivity across India.

Key Features of the Agricultural Infrastructure Fund (AIF)

🔹 Total Corpus – ₹1 Lakh Crore allocated over 10 years (2020-2029).
🔹 Interest Subvention – 3% interest subsidy on loans up to ₹2 crore per project for 7 years.
🔹 Credit Guarantee – CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) coverage for loans up to ₹2 crore.
🔹 Tenure – Maximum loan repayment period of 7 years.
🔹 Multiple Loan Applications – Eligible entities can apply for multiple projects.
🔹 Moratorium Period – 6 months to 2 years (based on project size).
🔹 Target Beneficiaries – Farmers, FPOs, SHGs, Agri-Tech Startups, Cooperatives, PACS, Agribusinesses, etc.
🔹 Easy Application Process – Online portal for quick and transparent approvals.

The AIF scheme ensures that credit reaches the right beneficiaries at affordable rates to accelerate rural development.

Eligibility for Agricultural Infrastructure Fund (AIF)

The following entities are eligible to avail of loans under AIF:

✅ Eligible Applicants

✔ Individual Farmers
✔ Farmer Producer Organizations (FPOs)
✔ Self-Help Groups (SHGs)
✔ Cooperatives & PACS (Primary Agricultural Credit Societies)
✔ Agri-Entrepreneurs & Startups
✔ State & Central Agencies
✔ Marketing Cooperatives & Agribusinesses
✔ Federations & Federated Organizations

❌ Who is Not Eligible?

🚫 Farmers with low credit scores or existing NPAs (Non-Performing Assets).
🚫 Entities involved in non-agricultural activities.

Eligible applicants must have a valid business plan and a feasible infrastructure project to apply for loans under AIF.

Infrastructure Projects Covered Under AIF

AIF supports a wide range of agricultural infrastructure projects, including:

1️⃣ Post-Harvest Storage Infrastructure

🏢 Warehouses – Safe storage to reduce crop damage.
❄ Cold Storage & Refrigeration Units – Preserve fruits, vegetables, and dairy products.
🔖 Silage & Fodder Storage – Maintain livestock feed.

2️⃣ Processing & Value Addition

🥫 Primary Processing Centers – Cleaning, sorting, and packaging units.
🌾 Grain & Pulse Processing Mills – Value addition for higher profits.
🍉 Perishable Goods Processing – Fruits, vegetables, and dairy-based businesses.

3️⃣ Supply Chain & Marketing

🚛 Logistics & Transportation Hubs – Better connectivity for farm produce.
🏪 E-Trading & Digital Platforms – Online marketplaces for direct farmer-to-buyer sales.
🎭 Agri-Marketing Infrastructure – Farmer markets & rural business hubs.

4️⃣ Other Essential Infrastructure

🌊 Irrigation & Solar Pumps – Water-saving technologies.
🔬 Quality Testing & Certification Labs – Ensure export-quality products.
🚜 Smart Agri-Tech Centers – AI, IoT, and precision farming technologies.

By developing these modern facilities, farmers can improve their earnings and reduce losses.

How to Apply for the Agricultural Infrastructure Fund (AIF)?

Farmers and organizations can apply for AIF loans online through the Agricultural Infrastructure Fund Portal:

1️⃣ Online Application Process

📌 Visit https://agriinfra.dac.gov.in.
📌 Register as Farmer/FPO/Startup/Enterprise.
📌 Submit Project Proposal and Bank Loan Application.
📌 Upload necessary documents (Aadhaar, PAN, Land Records, etc.).
📌 Select Bank/NBFC for Loan Processing.
📌 Track application status on the dashboard.

2️⃣ Offline Application

📌 Visit the nearest bank branch or NABARD office.
📌 Submit the project proposal with financial details.
📌 Bank will review and process the loan.

The application process is simple, making it easier for farmers and startups to access credit.

Benefits of the Agricultural Infrastructure Fund (AIF)

✅ For Farmers

✔ Increased Profits – Store crops and sell at higher prices.
✔ Reduced Post-Harvest Losses – Minimize crop wastage.
✔ Better Market Access – Sell directly to retailers and consumers.
✔ More Job Opportunities – Employment in warehousing, logistics, and agri-processing units.

✅ For Agri-Entrepreneurs & Startups

✔ Low-Interest Loans – 3% interest subsidy for 7 years.
✔ Easy Credit Access – Loans with CGTMSE guarantee.
✔ Business Expansion – Scale up operations with modern infrastructure.

✅ For Rural Economy

✔ Modernizes Agriculture – Brings technological advancement.
✔ Increases Rural Employment – Creates jobs in processing & logistics.
✔ Strengthens Supply Chain – Reduces reliance on middlemen.

AIF promotes sustainable agriculture, ensuring long-term economic benefits for farmers.

Challenges & Limitations of AIF

🔴 Slow Adoption Rate – Many farmers lack awareness about AIF.
🔴 Delays in Loan Approval – Bureaucratic processes slow down funding.
🔴 Collateral Issues – Some small farmers struggle to get loans.
🔴 Infrastructure Utilization – Need for better market connectivity.

To address these challenges, the government is conducting awareness programs and streamlining loan disbursement.

Conclusion

The Agricultural Infrastructure Fund (AIF) is a game-changer for Indian agriculture, providing ₹1 lakh crore in financing to build modern farming infrastructure. By promoting warehouses, cold storage, and food processing facilities, AIF ensures better prices, reduced wastage, and increased farmer income.

To maximize its impact, farmers, FPOs, and startups must actively apply and utilize AIF funds for sustainable agriculture growth.

For more details, visit: https://agriinfra.dac.gov.in.

Read about PM Kisan Maandhan Yojana (PM-KMY) - here

Got more questions about Indian government processes and schemes? Ask jaankaarbharat.com